Property, intangible

a blog about ownership of intellectual property rights and its licensing

An Assignment of the Contract, Not the Patent

Applera Corp. v. MP Biomedicals, LLC is an infrequent occurrence, a patent-related case in state court. In the case, the two original contracting parties entered into a royalty-bearing patent license for the PCR (polymerase chain reaction) process for amplification of DNA. The license included terms for ascertaining royalties based on whether the products would infringe a valid patent claim.

The original licensor assigned the license to plaintiff Applera, including the right to collect all royalties accruing or arising on or after the Effective Date, but it didn’t assign the underlying patents. The original licensee went through some acquisitions and a change of name to MP Biomedicals, S.A., of which the defendant, MP Biomedicals, LLC, is the grandparent. The licensee had been preparing the reports on royalties due, but the royalties never made their way into the plaintiff’s pockets, so Applera sued.

The defendant claimed that Applera didn’t have standing because it wasn’t the owner of the patents. Indeed, Federal Circuit cases are universal that a plaintiff must have some sort of interest in the patent in order to have standing to sue for infringement; a private agreement assigning the right to sue isn’t enough. But this wasn’t a patent infringement suit, it was a breach of contract case that did not necessarily depend on the resolution of patent issues – indeed, at trial there was no evidence about patent infringement entered. Rights to payment and choses in action may be assigned under California law, thus, Applera had standing to sue, California state court had jurisdiction for the breach of contract claim even though it involved patents, Applera hadn’t waived its right to invoke Swiss law for its claim for attorneys’ fees, and MP Biomedicals had to pay up.

In Applera Corp. v. MP Biomedicals, LLC, No. G038984, 2009 WL 1151861 (Cal. App., 4th Dist. April 30, 2009)

© 2009 Pamela Chestek

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